I guess because it isn't perfect??
A passing bandwagon poses a question for any observer. Jump on to it, or let it go past. In the global economy, there is only one bandwagon in town: artificial intelligence.
"for countries that have the right conditions for data centres, the AI investment boom is a growth opportunity like no other."
On the face of it, few countries in the world are as suitable as Iceland. Thanks to its hydroelectric and geothermal power, it generates almost 100 per cent of its electricity from renewable sources. The country’s grid was also built largely to cater for aluminium smelting, which accounts for about 80 per cent of energy consumption. Smelting requires an extremely reliable supply, because if power is lost for more than three hours the molten metal can solidify, destroying entire manufacturing plants. The reliability and sustainability of the grid makes it particularly attractive for data centre operators.
This is a pretty interesting reflection:
The climate means operators can spend significantly less on cooling the hardware. Verne claims that its data centres run with a power usage effectiveness of about 1.05, meaning for every $1 it spends on power to run the servers, it has to spend only 5 cents on things like cooling. The industry standard across Europe is about 1.36 to 1.6.
The value-add isn't really price but avoiding otherwise necessary expense.
Verne runs a 140 megawatt (MW) site on an old Nato base in Keflavik, on the southwest corner of the island. It has owned the site since 2008 and opened its data centre campus in 2012 with BMW as its anchor tenant. The carmaker leased space to run complex computations, like crash simulations, aerodynamic calculations and engineering for new vehicles.
During the 2010s two other operators — atNorth and Borealis — opened sites in Iceland, largely concentrating on bitcoin mining. For a time, bitcoin mining used more of Iceland’s electricity than the country’s more than 330,000 inhabitants. Karl Gudmundsson, head of strategic investments in the prime minister’s office, said this posed problems for the industry. “The social licence was hardly there. People were like, ‘Why are we doing this? This doesn’t make sense’.”
SOCIAL LICENSE seems like the world's most fiat thing... but alas, democracy runs the show so here we are.
We're all AI companies now
In recent years, however, all three operators have pivoted towards AI workloads. A fourth operator, Akur, revealed plans for a 120MW campus in the far north of the country last month. Major customers in Iceland include the neocloud firms Nscale, Nebius and Crusoe.
Iceland is not suitable for every AI workload, particularly those which require exceptionally fast processing time, such as high-frequency trading or streaming. But Dominic Ward, Verne’s chief executive, argued this only removed about 5 per cent of the global computing market. “We’re only 10 milliseconds on a subsea fibre network down to Dublin. We’re 21 milliseconds down to London. 19 milliseconds down to Denmark,” he said. “No user, and probably no computer, is actually really going to notice that it’s a further distance away physically.”
I didn't know the distance made such a comparatively small difference.
The only problem is other countries are getting there first. Norway received a $6.2bn investment from Microsoft last year as part of the Stargate initiative, while Google invested €13bn in Finland last month.
oops. Oh well, GO NORDICS??
"Politically, there are obvious reasons for caution. Around the world, data centres are not popular."
gooooood point
Also, water use (as dumb of an objection as that is) isn't a thing for the Icelandic data centers:
“Most of the water usage at our site stems from the fact that we have 50 full-time staff who need to use the bathroom,” he said. Gudmundsson also said energy prices for local people had not been impacted by the data centres.
"The key practical obstacle to major expansion is the grid. Gudmundsson said that Iceland was not suitable at the moment for big hyperscale projects."
“All of the big US operators have been here at one point or another, just looking into what is possible. But their starting point is quite often just way too high for where we can actually deliver,” he said.
Nobody wants to build a dam big enough, dam large enough a pristine Icelandic river to generate the GWs necessary for the AI age.
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